Brexit: BaFin informs foreign banks

At the initiative of its President, Felix Hufeld, the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) invited about 50 representatives of foreign banks to a supervisory workshop in Frankfurt today to discuss specialist issues related to Brexit.

In the weeks leading up to the workshop, many institutions had already contacted BaFin to find out about regulatory and supervisory issues in Germany. Brexit will cause a fundamental change in the legal framework for the banks.

Today's event focused on, for example, questions of risk management, compliance requirements under the German Securities Trading Act (Wertpapierhandelsgesetz – WpHG), requirements for internal models, rules governing large exposures, provisions on recovery planning and various aspects of the authorisation procedure pursuant to the German Banking Act (Kreditwesengesetz – KWG) and the Markets in Financial Instruments Directive (MiFID).

Deputy Chief Executive Director of Banking Supervision, Dr Peter Lutz, said after the meeting: "As committed Europeans, we do not see Brexit as a reason to celebrate. But now we need to take a pragmatic approach and offer institutions the necessary supervisory clarity for their strategic decisions." BaFin was doing this to give institutions wishing to move their business to Germany a reliable basis for their activities, but also to avoid any risks arising for the German financial sector, Lutz added. In this respect, he saw a special role for BaFin as the integrated German financial supervisor, since it monitors the whole of the financial market. "BaFin is also pleased to continue as a point of contact in the future".